California is a Dual Agency state, which means that legally the agent can represent both you and the seller. It also mans that the agent MUST represent your interests as well as the seller's. This can be a challenge to ensure that both sides are treated fairly. Many agents can do this, but some don't do it as well. Given that the agent represents the developer in all the units being offered, you can make your own conclusions as to which side the agent may lean towards, should he/she not represent both sides properly.
The fee is something that I do not charge my client's and personally dislike, because I believe that the fees are part of the service that I provide you. It is like me saying that I am happy to take a commission to sell your home, but you have to pay for the "sale" sign. Having given you my personal opinion, it is not illegal for them to charge a fee. However, all fees are negotiable. Therefore, you can say that you won't sign it and refuse to pay the fee. Keep in mind that you must do this within your contingency period.
I believe that it is always better for a buyer to have his/her own representation in these situations. Whenever an agent is representing an entire development, they have more incentive to help the developer rather than the individual.
If you are beyond the contingency periods, you may want to consider consulting an attorney to help you. If you are still within the contingency period, you may want to negotiate the fee or possibly back out of the deal and get representation of your own. (Please keep in mind that this advice is based upon the information you have provided and that it is hard to provide an accurate opinion without knowing all of the details of the transaction.)
I hope that you are able to come to a resolution that works for both you and the seller, but if it doesn't I would recommend that you get your own representation before looking again. Remember that in our market the seller is usually the one who pays the commission and if you go directly to the listing agent you are not saving money, only ensuring that the listing agent gets all the commission.
Lb, Of course agents on this site are going to tell you that the listing agent is entitled to double commission for work they did not do. On top of that, they have the audacity to ask for an additional service fee! What you should do in this situation is find a friend who is an agent (everyone has one, as they are a dime a dozen) and have them represent you. Have your friend take the 3% buyer's commission and refund you most of it. Give your friend a few hundred dollars for the 2 hours of work it will take to finalize your transaction. This way the listing agent is not stealing your money from you, your friend makes a little cash for very little work, and you save a few thousand dollars off the price of the condo. Thank me later.
1. You didn't want to use a buyer's agent in order to save money. Let's say you offered $300k for this unit so it cost you $300k. If you had a buyer's agent and offered $300k the unit would have cost you---$300k. Buyer's agent commissions are paid by the seller. As a listing agent I LOVE it when people make offers without a buyer's agent--Because I know my seller is going to net more this way.
2. The "service fee." I would ask them to cover that from their commission.
3. Agency disclosure form: Sign it if you want the condo. This listing agent who helped you actually BECAME YOUR AGENT when you did the offer and paperwork. Like it or not, this is your buyer's agent--And your buyer's agent also happens to be the listing agent.
The value of a buyer's agent is NOT in finding a place. Anyone can find a house on the web. The true value of a buyers agent is in negotiating better terms and price than most people can get on their own as well as keeping you legal and protecting you from "hidden" surprises.
And to respond to the answer directly underneath this one--AGAIN--Buyer's agent commission is paid by the seller. If you hired an attorney that money would come out of YOUR pocket, so that condo would cost even MORE than if you had just used a buyer's agent. Some people are so determined to be penny-smart and pound-foolish!
You do not have to pay anything.
You can walk away from this transaction, and maybe you should. It sounds to me as though you are a first time buyer. The BEST thing you can do is to become educated about buying a home. When you purchase a home, one of the most complex and costly transactions you will ever make, you need someone that you can trust.
I sense a lack of trust here. So my recommendation is for you to step back, rethink and to find a Realtor that will represent your interests faithfully. If you would like a referral of a top Realtor in your area let me know.
This is a sticky situation, but dual agency is legal in California. The listing agent should have informed you that this is/will be a dual agency if you are not represented by your own Realtor. The Agency Relationship should have been one of the first Agreement she presents to you and explain in detail. You may want to check your Agreements that you signed with her. She has a fiduciary duty to both Seller and Buyer, this can be a challenge but it can be done. If you are feeling very uneasy about this situation then you may want to consider talking with your agent/listing agent or back out of the deal.
Best of luck to you.
If the buyer chooses to go unrepresented, he should then get what he wants. If wants to be represented, he should recognize in order to get representation, its going to cost. DUH
Bill, its seems to me you expect full service representation without have the agent get paid for it.
I dont blame you for not understanding how it works, I blame ill prepared agents who simply would shave their commissions every time a client asked for it. Not only is unethical its illegal.
Bill, its not about greed. Its about being a Professional in what ever business you are in an taking your business seriously.
I feel more like an eductor these days explaining that buyers are "Buyers" not negotiators.
Get your own agent preferably an exlusive buyers agent in your area. Try the National Association of Exclusive Buyer Agents for a referral. If you do not wish to use an agent, see if you can negotiate the additional cooperative compensation out of your deal which is likely 3%, but may vary.
But guess what--The listing agent works for the SELLER. The listing agent's first loyalty HAS TO BE to the SELLER. See where I'm going here?
Everything is negotiable and we don't know the details of the buyer's offer. Perhaps the buyer brought in a lowball offer and the listing agent had to agree to give back some $ to the seller in order to get the buyer's offer accepted? We don't know, so this topic at best is a general discussion.
Bill, you are certainly entitled to your opinion, and while I do appreciate the publicity, I have to tell you that you really are off base. In many cases I pay closing costs or contribute a portion of my commission for either my client or the OTHER agent's client in order to get a transaction accepted.
My job is to represent the interests of my client, and if my client wants a transaction to happen a certain way I sometimes have to make sacrifices to accomplish that. If I do my job well, I should be compensated. If I could bring you an extra $10,000 today, would you pay me $300 for doing that?
The seller pays the commission to a BONIFIED Professional not a unlicensed buyer.
Do yourself a favor a GET REAL on the Buying Process. Just because a non ethecial agent states a buyer deserves commission does not make it gospel.
Well you chose the latter. Irregardless, the agent who accepted their offer has still done thier job to assist you and seller and should get every penny of the commission they earn.
I'm with Ray. Every buyer deserves his own representation. Perhaps you should voice your concerns with the dual agent. You should have signed an "Disclosure Regarding Agency" when you made the offer. Did you do this? This document explains dual agency. Look through your copies of your documents to see if you did indeed sign this.
Either way you should explain to your agent that you do not want to pay the service fee. If you don't get a satisfactory response, insist on speaking with the agent's broker.
If you don't complete this transaction, please, please, please get an agent to represent you. I can recommend someone good in your area.
Best of luck,
Ray gave you an excellent answer. My agency does not charge a paperwork fee to our buyers...I've always thought that was a bad idea - it is just part of our job and our expenses to do our job.
Before I was an agent a Realtor tried to charge me that fee and I refused...I negotiated with her to remove the fee as I believed it was unfair.
You really should express your concerns to the agent as he/she does represent you AND the seller. A mold disclosure is pretty normal...are you saying they hid the fee within the mold disclosure?
You can consult with a real estate attorney to set your mind at ease.
All my best!
Mold disclosure? For a new property? I am confused on that. My company has an administrative fee that buyers and sellers pay at the closing. This is a common fee, but it has nothing to do with mold.
I am not sure what you can do in your state, but you might really want to talk to a Real Estate Attorney. It really seems they should have disclosed that they were acting as a dual agent and put it in writing prior to writing the offer with you. I think speaking with a Real Estate Attorney may really give you peace of mind if you should continue to proceed.
I hope this information helps! Best Wishes!